Cost-cutting ‘overused' by UK firms

According to the survey by accountant PricewaterhouseCoopers, UK companies faced with tough economic conditions are relying on short-term solutions such as staff lay-offs, recruitment freezes and investment cuts to bring down costs.

But 66 per cent of UK chief financial officers admitted the costs they were taking out of their businesses now would creep back within two to three years.

Jonathan Tate, partner at PWC, said: "Cost is not the root of all evil. Too much cost-cutting can be fatal, leaving companies under-resourced for the future.